Starting from 2015, my country’s export trade “Textiles and Clothing Agreement” has been terminated, and textile and clothing quotas have been completely cancelled.
Whether they are state-owned enterprises or private enterprises, no matter how small they are, they can do foreign trade business. Guangzhou’s textile industry has gained unprecedented development opportunities. A large number of garment foreign trade companies, wholesale stalls, and garment processing factories have sprung up like mushrooms after a rain.
In the dividend period of industrial development, time is money
The reason for the rise of the Zhongda cloth market is that it shortens the factory’s procurement process and greatly improves production efficiency. If you are a clothing buyer, you can basically purchase all the raw materials and accessories for clothing at the Zhongda Cloth Market. At the same time, some fabrics ordered on the same day can be delivered in the afternoon.
The explosion of demand in the textile industry, efficient trading model, and strong supply chain have gradually made Zhongda Cloth Market a global fabric trading center.
National textiles look to Guangdong, and Guangdong textiles look to Zhongda. If the most congested road section in Guangzhou is selected, Ruikang Road in Zhongda Cloth Market will definitely be on the list. The 1.5-square-kilometer market has more than 100,000 business varieties, more than 100,000 direct employees, more than 2 million people in related industries, and an annual transaction volume of more than 200 billion. Zhongda has also become the most expensive wholesale market in Guangzhou. The annual rent for some stalls in good locations even exceeds 1 million.
The Zhongda Cloth Market 10 years ago was a magical place that created many wealth myths. But now, “There is no money to be made in the first half of the year, and there is no money to be made in the second half of the year.” This is the self-deprecation of many bosses of medium and large markets. Why has business become difficult to do? To understand this reason, we need to stand at a higher perspective. , take a look at what changes have taken place in the textile industry environment in Guangzhou and even in China.
From the perspective of national development, the climbing path of late-developing countries is basically the same. They all start with labor-intensive processing in the early stage, slowly accumulate capital, earn more money, and then invest in more profitable industries to achieve industrial upgrading. Textile processing is a typical example. In the early stages of development, labor, land and other factors are relatively cheap, and the technical threshold is low. China’s exports of clothes have a certain price advantage.
Although Guangzhou is on the front line in China, there is a lot of cheap space and labor around the Zhongda Cloth Market, such as Kangle, Lujiang, Datang, Longtan and other urban villages. These urban villages have gathered a large number of small clothing processing workshops. Production raw materials are provided by Zhongda Cloth Market, processed by surrounding garment factories, and then distributed to Shahe, Baima, Shisanhang and other clothing wholesale markets, forming a complete industrial closed loop. With the development of the city and the upgrading of industries, labor and land prices in Guangzhou are also rising.
30 years ago, we exchanged 800 million shirts for a Boeing aircraft. We are definitely not happy to do this now. 20 years ago, a worker in a garment factory earned only 2,000 yuan a month and had to work 10 hours a day. Above, in Guangzhou now, it is very common to earn more than 10,000 yuan a month by working hard on Meituan. If the garment factory cannot afford higher prices, then workers will naturally choose other industries. This is determined by the market.
In addition to the rise in labor costs, land rental prices in Guangzhou are also becoming more and more expensive. For example, some time ago, the two most expensive renovation projects in Guangzhou were in Kangle and Lujiang Village near Zhongda University, with investment funds of up to 34.6 billion. The rents in these places have been rising before, but after the renovation, land is even more expensive, and only more profitable industries can move in. It is obvious that the former garment processing factories and small workshops cannot afford the high rent after renovation. They can only survive by moving further away. Some people even choose to change careers directly and leave the industry.
On the other hand, other developing countries are also starting to learn from China, especially Southeast Asian countries. Although the quality of their population is not as good as ours, they cannot stand up to their cheap labor force. A piece of clothing costs so much, whoever has the most money will take the order. In recent years, many garment companies have chosen to set up factories directly in Southeast Asia. As time goes by, I believe Southeast Asia will also develop their own fabric wholesale markets.
The rising production costs of Guangzhou’s garment industry and intensifying overseas competition are the difficulties that the entire Guangzhou garment industry will face in the future. Let’s talk about China. In fact, the domestic clothing market is roughly divided into offline and online. Needless to say, offline physical stores, everyone knows how miserable these years have been.
As for online, it has also promoted the development of Zhongda Cloth Products Co., Ltd.The rapid development of the market. Currently, Guangzhou and Hangzhou are the most famous clothing e-commerce companies. Many of the raw materials for online clothing in Guangzhou are also purchased from the Zhongda Cloth Market. However, with the fierce competition among e-commerce platforms, especially the rise of Douduo and live broadcast, the cost of clothing has been directly driven to the floor price.
Interestingly, in recent years, many Comrades Puning and Tianmen who are engaged in clothing e-commerce in Guangzhou have chosen to return to their hometowns to start businesses and produce simple basic styles locally, thus bypassing the Zhongda Cloth Market, Guangzhou garment processing factories and clothing wholesale stalls. , further reducing costs. I believe that more cloth wholesale markets will be developed in the local area in the future. Although the scale and type cannot compete with the Zhongda cloth market, diverting customers from the Zhongda cloth market is a foreseeable future.
What will happen to the Zhongda cloth market in the future? Can be roughly divided into three categories
The first category is the industry leaders who stand at the top. They are often the source manufacturers themselves and have strong R&D capabilities. They basically have the pricing power of some products. Ordinary people cannot enter their field to compete with them. After all, this is a capital-intensive industry with very high barriers to entry.
The second category is innovative merchants who develop corresponding products based on hot market sales. They usually make adjustments in materials and printing, but they are very tiring. If the product innovation is successful, it is not a problem to make money for 2 years. Once 2 years have passed, you must transform, because the competition from peers and the time for fashion styles to become popular are only about 2 to 3 years. The myth of getting rich in one year is most likely for this group of people. It appears among them, but this requires smoke from the ancestral tomb and great luck.
The third category is traditional service-oriented merchants. This group of merchants generally provide whatever customers need. Their R&D capabilities are basically zero. They copy whatever sells well in the market, or even adjust goods to make a price difference based on information. It is estimated that later Will be rolled into twists. Many times, when a merchant provides good service, the customer himself fails for no reason. In fact, this is related to the industry trend and requires a little luck. After all, the customer himself is bad, and it will be useless even if you serve him to the sky. So, in addition to doing For good service, merchants must burn more incense for customers every day. The market may eliminate many people in the future. For this type of merchants, it would be good if they can transform into the second type of merchants. If they cannot, maybe every year in the future, It was the worst year in the past ten years and the best year in the next ten years.
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